GAAP for Startups

By editor on February 20, 2018 — 1 min read

You may have heard this term, but when you’re a public company there’s something called GAAP financials? Generally Acceptable Accounting Principles, and that’s how you report numbers. Profit, loss, revenue… you know, all of this stuff. So there’s a set of rules that the industry uses to make sure that you can compare apples to apples across companies.

So we said, well, why can’t we create that exact same thing for non-financial metrics? For product health. For user engagement. For all of the things that we care about in the early stage that can really help us think through product-market fit.

And so we built those into tools and we were using them so often, internally, to help make decisions. It was crazy, because we had this debate, “Well, this is our secret sauce. We should not release it.” And then it was like, “Actually, no, that’s not the secret sauce. The secret sauce is being able to look at it and then make a better decision.”

It’s now available. You can use it if you want, you can actually send us the data automatically and we’ll actually look at it with you, and give you our interpretation. Over the next few months we’re gonna be able to allow you to benchmark the data. So, if you want to understand how your MRR growth stacks up to 60 of our best companies, you’ll be able to do that. If you want to figure out whether your cohorts, and users, are as good as Facebook’s publically available data, we’ll be able to allow you to benchmark it to that.

So it’ll just be this ongoing thing and, what we’re trying to do is create, for non-financial metrics, an automated system that allows [entrepreneurs] to just be better informed. And again, that makes the ecosystem better, it improves your odds of getting financed, because now you have a better way of presenting the information, be more sophisticated about what you’re building. Maybe at the edges, you decide that it makes a lot of sense to work with us because we know that stuff too. If that happens, so be it.